EconPapers    
Economics at your fingertips  
 

Cautious Farsighted Stability in Network Formation Games with Streams of Payoffs

Mariya Teteryatnikova ()
Additional contact information
Mariya Teteryatnikova: http://www.univie.ac.at/Wirtschaftswissenschaften

Vienna Economics Papers from University of Vienna, Department of Economics

Abstract: We propose a new notion of farsighted pairwise stability for dynamic network formation which includes two notable features: consideration of intermediate payo s and cautiousness. This di ers from existing concepts which typically consider either only immediate or nal payo s, and which often require a certain amount of optimism on the part of the players in any environment without full communication and commitment. We show that for an arbitrary de nition of preferences over the process of network formation, a non-empty cautious path stable set of networks always exists, and provide a characterization of this set. Strongly ecient networks do not always belong to a cautious path stable set for a common range of preference speci cations. But if there exists a Pareto dominant network and players value payo s in a nal network most, then this Pareto dominant network is the unique prediction of the cautious path stable set. Finally, in the special case where players derive utility only from a nal network, we study the relationship between cautious path stability and a number of other farsighted concepts, including pairwise farsightedly stable set and von Neumann-Morgenstern pairwise farsightedly stable set.

JEL-codes: A14 C71 C92 D85 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth and nep-net
Date: 2015-08
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://homepage.univie.ac.at/Papers.Econ/RePEc/vie/viennp/vie1509.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:vie:viennp:1509

Access Statistics for this paper

More papers in Vienna Economics Papers from University of Vienna, Department of Economics
Series data maintained by Paper Administrator ().

 
Page updated 2017-09-22
Handle: RePEc:vie:viennp:1509